India's Floundering Social Sector

N C Saxena

India's aspiration to become a middle-income country has to come to terms with its poor performance in the social sector. India is fairly slow in improving social indicators even when compared to other poor countries.

The recent Global Hunger report shows that hunger in India during 1996-2011 has become more acute whereas it declined in Pakistan, Bangladesh, Nepal, Kenya and Uganda. The recent hunger and malnutrition (popularly known as HUNGaMA) report released by the Prime Minister in January 2012 similarly shows that the number of malnourished children in the 100 studied districts continues to be above 40 per cent. The continuing decline in the juvenile sex ratio over the last three decades, visible in the Census data, is an indication that the constitutional assurance of freedom and equality for women is still far from being fulfilled.

Although central allocation for programmes in the social sector has gone up by almost ten times in the last decade, part of the increase is illusory because the Pay Commission Award has added to the salary burden. Thus the budget increase may not have resulted in corresponding increase in the number of teachers or doctors. Second, 70 to 80 per cent of the total expenditure on the social sector is borne by the states, but they have not been able to arrest the decline in social expenditure as a proportion of their total expenditure. It is likely that as Government of India stepped up its share in social sector expenditure, states decided to cut down on the plan schemes that they were supporting till the last decade.

It is not the size of allocations on pro-poor services alone that matters. Unfortunately, different kinds of distortions can come in the way of resource allocations reaching the intended beneficiaries. There is enough evidence to show that government’s capacity to deliver has declined over the years due to rising indiscipline and a growing belief widely shared among the political and bureaucratic elite that the State is an arena where public office is to be used for private ends. Weak governance, manifesting itself in poor service delivery, excessive regulation, and uncoordinated and wasteful public expenditure are some of the key factors impinging on development and social indicators.

Government programmes also tend to discriminate against and exclude those who need them most, compounded by state hostility to poor urban migrants, street and slum residents, dispersed hamlets and unorganised workers such as hawkers. In Rangpur Pahadi, a slum area just a few kilometres away from Vasant Kunj in New Delhi, people living since 1980 have not been given a voter ID card or a ration card. Thus their very existence is denied by the Delhi government!

A recent evaluation of the ICDS programme in Gorakhpur by the National Human Rights Commission showed that despite Supreme Court orders to provide hot cooked meals, all centres supplied only packaged ready-to-eat food, which had only 100 calories as against a norm of 300 calories, and 63 per cent of food and funds were misappropriated. The food being unpalatable, half of it ends up as cattle feed. However, such reports, though few, are never discussed in state assemblies, as they meet now for less than 30 days a year. We need a new law making it compulsory for Parliament and Assemblies to meet for at least 150 days a year.

Ineffective M&E systems

At present officials at all levels spend a great deal of time in collecting and submitting information, but these are not used for taking corrective and remedial action or for analysis, but only for forwarding it to a higher level, or for answering Parliament/ Assembly Questions. Often data on performance reaches late, or is not available district-wise, with the result that accountability cannot be enforced.

The stated objective of the ambitious MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme) is to accomplish drought proofing and increase agricultural production on marginal holdings, especially in semi-arid regions and uplands, but the sustainability and productivity of assets created is never monitored with the result that the programme is reduced to creating short-term unproductive employment with no focus on asset creation or soil and water conservation. Its impact on agriculture may even be negative, as alleged by the Ministry of Agriculture. In any case it makes no sense to run the programme in the labour scarce districts of Kerala, Punjab, Haryana, Himachal Pradesh and the north-east. On the other hand, the upper limit of work guarantee of 100 days should be enhanced to 150 days per household in the poorest 200 districts, with assets such as ponds, bunds, check dams and planted saplings being monitored for at least five years.

We certainly need more government teachers and doctors but what if almost half of them are absent and busy in private practice? It is deplorable that neither the Government of India nor the states monitor and measure absenteeism regularly. Policy-makers admit that huge errors of inclusion and exclusion exist in identifying the poor but when did we last measure this? Seven years ago, in 2004-05. When was the Public Distribution System (PDS) last evaluated? Nine years back, in 2002-03. Surely, more frequent assessments by the central government could have put pressure on the states to improve delivery.

The gap is most glaring where the poorest of them all – the tribals – are concerned. Persistent problems faced by tribals – land alienation, indebtedness, government monopoly over minor forest produce and the non-implementation of the Forest Rights Act, 2006, among others – have by and large remained unattended. The current approach of the Ministry of Tribal Affairs (MoTA) is to confine its attention to its own budget and the schemes that are under its control, such as grants to NGOs, scholarships, etc. MoTA does not put any pressure on other ministries that have been vested with the responsibility to ensure that basic justice and development reaches the tribals. MoTA does not even monitor whether basic services in education, health or nutrition are reaching the tribal hamlets.

Equally, state governments do not discourage reporting of inflated figures from the districts, which again renders monitoring ineffective. As data is often not verified or collected through independent sources, no action is taken against officers indulging in bogus reporting. Objective evaluations show that 43.5 per cent children are underweight, of which 17 per cent are severely malnourished. However, the state governments report 13 per cent children as underweight, and only 0.4 per cent as severely malnourished (India Human Development Report, 2011). One district collector, when confronted with this kind of bogus figures, told me that reporting correct data is “a high-risk and low-reward activity!” The Prime Minister may call the government’s performance as a “national shame”, but he has not been able to persuade the states to accept that the problem exists, forget about the solutions.


Outlays should not be considered as an end in themselves. Delivery of social services requires increasing financial resources, but more important is the quality of public expenditures in these areas. This in turn requires improving the certainty of budgetary flows, monitoring of outcomes, governance, productivity and accountability of government machinery.

The Government of India transfers upwards of 4,000 billion rupees every year to the states. If even half of it was sent to the 80 million poor families directly by money order, they would each receive more than 100 rupees everyday! It proves that public expenditure needs to be effectively translated into public goods and services that reach the poor for it to have an impact on poverty and social outcomes.

The Government of India should construct a quantifiable annual composite index on the basis of certain agreed indicators such as infant mortality rate, extent of immunisation, literacy rate for women, sex ratio, feeding programmes for children, availability of safe drinking water supply, use of toilets, electrification of rural households, rural and urban unemployment, percentage of girls married below 18 years, percentage of villages not connected by all weather roads, and so on. Once these figures are made public, states may get into a competitive mode towards improving their score. Part of central transfers should be linked to such an index. As of now the states come to the Planning Commission and say, “Give us money, we are poor.” If the suggestion to link transfers with performance is accepted, they would be saying, “Give us money because we are reducing poverty.”

One way to bring in accountability is to start a system of holding public hearings in matters pertaining to the works handled by each office. Prominent social workers and NGOs should be associated with this exercise for more productive results. Teams would undertake surveys of quality of service delivery in key areas; scrutinise policies programmes and delivery mechanisms. Civil servants’ views on work constraints and reporting fraud and corruption should be elicited. The reviews conducted should also form the basis of time-bound changes and improvements, which should be monitored.

Concentrate on the excluded groups

It is well known that economic and social progress has generally bypassed Scheduled Castes (dalits), Scheduled Tribes, women and people living in remote areas who have remained voiceless and ignored. The crux of such a hopeless situation for them lies in their inability to access and retain their rightful entitlements to public goods and services due to institutionalised structures and processes of exploitation. This can be changed through dissemination of studies that analyse discrimination and neglect, and suggest practical steps how the situation can be improved.

Excluded groups are disadvantaged in many ways. They are victims of prejudice, are ignored, and are often treated as less than human beings by the village elite and government officials. They live in remote hamlets and are thus geographically separated from the centres of delivery. Their hamlets are scattered so the cost of contacting them is higher. Finally it is their extreme poverty that prevents them from taking advantage of government schemes, whether it is free schooling (children are withdrawn because their labour is needed at home or for work), or immunisation (they migrate along with their parents and are therefore not present in the village when the ANM visits).

For instance, despite three BPL surveys (1992, 1997 and 2002) the errors of exclusion and inclusion in the list remain above acceptable limits. Errors of exclusion are those that misclassify the poor in the non-poor category, while errors of inclusion include the non-poor in the poor category. These errors are not likely to come down with the new Socio-Economic Caste Census which has a flawed design.

Incidentally, the recent joint statement of the Deputy Chairman, Planning Commission and the Minister of Rural Development that the present state-wise poverty estimates will not be used to impose any ceilings on the number of households to be included in different government programmes will further encourage the states to inflate the numbers of their poor. In other words, in each state when a non-poor was selected as a BPL household it was at the cost of a poor in the same state, and it did not increase the total number of poor beneficiaries in that state because of the state cap. Once the cap is removed, showing more deprivations in a state will be advantageous to that state as it will be at the cost of the poor of other states. We will thus incentivise and encourage wrong reporting. Inter-state bic kering will also increase as the states with fewer priority households will blame other states of deliberate fudging their numbers.

To sum up, despite good achievement on the growth front, India faces significant challenges and needs to revamp its social sector policies. Addressing these issues will need a focus on cross-cutting systemic issues like dilatory budgetary flows, M&E of programmes, personnel and administrative reforms, and accountability. Till such time that the states show signs of improvement in governance, they will need external pressure on them to improve outcomes, and certain control by the central government over funds and policy domain in the social sector is necessary.

N C Saxena is Distinguished Fellow, Skoch Development Foundation

(The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of INCLUSION. Comments are welcome at

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